The Biggest Threat To Minimum Wage Restaurant Workers Everywhere?

Over the past year, unionized restaurant workers across numerous fast-food chains but mostly at McDonalds, expressed their dissatisfaction with compensation levels by striking at increasingly more frequent intervals - a sentiment that has been facilitated by the president himself and his ever more frequent appeals for a raise in the minimum wage. Unfortunately, as we have pointed out previously, in the context of corporations that have given up on growing the top line (as virtually all free cash goes into stock buybacks and dividends and none into growth capex), and in pursuit of a rising bottom line, employee wages are the one variable cost that corporations will touch last of all. But what's worse, these same unionized employees have zero negotiating leverage.

Perhaps nowhere is this more visible than in the recent strategy of smoothie retailer Jamba Juice, which in order to battle a 4% drop in Q3 same store sales has decided to radically transform its entire retailing strategy by getting rid of labor, cheap, part-time or otherwise, altogether. Presenting the biggest threat to minimum-wage restaurant workers everywhere: the JambaGo self-serve machine that just made the vast majority of Jamba's employees obsolete. Coming soon to a fast-food retailer near you.

Why did Jamba just make its retail sales force obsolete? Part of the problem is heightened competition: McDonald’s has entered the smoothie market, and others like Dairy Queen and Panera spent the summer promoting their rival drinks. Which means even less top-line growth potential. It also means that in order to push more of the top line straight to earnings, and bypass variable costs, a problem that will be faced by increasingly more corporations, Jamba's corner office had no choice but to unleash JambaGo.

The smoothie chain is hoping to see improvement from something it calls “JambaGo,” a self-serve machine that can be installed in cafeterias, schools, and convenience stores. Jamba Juice makes money by selling the prepackaged, pre-blended smoothie ingredients to JambaGo vendors, like a soda maker selling syrup to the owner of a soda fountain. The advantages: Jamba doesn’t need to build a store and the labor costs are much lower compared with hiring staff to concoct made-to-order drinks.

The company expects this model to help expand its brand more quickly and cheaply. Last quarter, however, revenue from the JambaGo program amounted to just about $400,000. But having recently landed a deal with Target (TGT) to put JambaGo machines in 1,000 Target Cafés, the company will soon have installed more than 1,800 machines (up from only 404 at the start of 2013). By contrast, there are currently about 850 Jamba Juice stores.

Based on a goal of $2,000 in annual revenue per JambaGo, the rough math for 1,800 machines is $3.6 million—a decent boost for a company that took in $228.8 million in revenue last year. Another 1,000 are planned for 2014, which would bring in another $2 million in annual revenue.

Here's what happens next: Jamba will do what every other company does to demonstrate that its radical strategy is successful - fudge the numbers and beat EPS for several quarters. This will happen even if JambaGo is ultimately yet another loss leader. However, its peers will watch closely and soon decide to roll out their own version of just this: a self-contained dispenser of a la carte prepared fast-food food, either liquid or solid, and in the process let go tens of thousands of their own minimum-wage employees, also known to shareholders as "costs."

What happens after that should be clear to everyone: more unemployment, lower wages for the remaining employees, worse worker morale, but even higher profits to holders of capital. And so on. Because in a world in which technology makes the unqualified worker utterely irrelevant, this is what is known as "progress."

Not a problem, actually to the benefit of those poorly paid, no benefits workers...Form the jobs they hold today, inure no sense of self-esteem.Better they're put on the dole.Treated better.By ObieWorld

to sarc or not to sarc, that is the question, for reality has become so fucked up that misery is our new perpetual companion.

A raised bed with well-forked, uncompacted soil in a sunny location will do wonders for most root crops. I had sweet potatoes that size last year.

What was stunning was that I didn't even put them in the ground until mid-July. I had 4 potted sweet potato plants I'd started from clippings of those I'd grown the previous year, but no space for them outside until I harvested the garlic. I put one in each corner of the 12' by 4' raised bed, encouraged them to vine toward the center, and cleared some straw from the soil every couple of feet so they could send down more roots. I had to dig them up mid-October to plant more garlic, and many were as big as those in HH's picture.

Machines don't bitch about long hours, no free healthcare, vacation time, raises, someone getting promoted when they should've been promoted, complain about customers, treat customers like shit, talk on the phone when they should be working, complain about their work, walk off the job, etc etc etc...

But i'm not happy with this new trend, because a job is also training and even of meager, represnets the potential to do better (if we ever have a real economy again) . We don't like the attitude of workers? Wait until they don't work, have zero future, but an ever worth-less government check. We that have anything to ou names will be living like they do in Jakarta and Latin America. Behind walls.

"Starbucks’ 95,000 baristas have a competitor. It doesn’t need sleep. It’s precise in a way that a human could never be. It requires no training. It can’t quit. It has memorized every one of its customers’ orders. There’s never a line for its perfectly turned-out drinks. It doesn’t require health insurance."

The coffee vending machine concept brings up a good point that the machine will end up being the equivalent of the iPad to the computer. You have both but you look up more things on the net with the iPad than the computer and the same will happen with these vending machines resulting in less trips to fast food restaurants leading to closings and less restaurant jobs.

Where people are cutting costs, they are not going to be buying on the go at all. They will pony up the $10 for the mugs, another $10 for high quality coffee and just make their own, a cafetiere costs another $10, or a coffee machine maybe a bit more. Saving what $5? $10? per day as they do it.

Even worse, TIC, are the hordes of mindless, utterly lazy, mindless, gullible, trend-sucking, mindless, spendthrift, mindless, idiotic (and did I say MINDLESS?!) fools who buy WATER at $1.69 or $2.49 or whatever the fuck price at a 'convenience' store, when they could fill and carry a thermos, or the exact same fucking bottle for God's sake, for essentially FREE at home! This bottled water bullshit trend has to be one of the biggest self-inflicted ripoffs and scams I have EVER seen in my life! I'll be DAMNED if I am ever going to PAY for fucking water!

This bottled water bullshit trend has to be one of the biggest self-inflicted ripoffs and scams I have EVER seen in my life!

Saturday at the grocery store in one of the beverage aisles I passed a couple searching the bottled water looking for the variety that was on sale. I just thought to myself that they could get the same product at a substantial savings by refilling their bottles from the tap.

I'll be DAMNED if I am ever going to PAY for fucking water!

Generally in agreement, although purchasing distilled water at 99 cents per gallon makes better use of my time than distilling it myself. I also have various uses for the polyethylene jugs which, to the garage scientist/experimenter/recycler, are far more useful and made with less troublesome chemicals than the poly(ethylene teraphthalate) water bottles.

I think of my infantry days. Drinking sugar cain field puddle water with some iodine caps. And, talk about leaching plastic. I have no idea what those low bid canteens were made of. Coffee? Rip open instant powder pack, pour/knock back into mouth the powder and chase with said plastic/liodine pond scum.

So, its all good.
Won't do Starbucks. Overpriced and the help and sheeple creep me out.
McD, not bad.
Good instant, great.
I get it to waken up or continuing donkey rax slaving.

If you really want amazing coffee, use an extruder & brew under high pressure with a water temp at about 210 °F degrees (or 98.9 degree Celsius for those in the far saner world of the metric system) -

- even coffee made with average beans this way will taste incredible, and the cost comes down to about 1/30th of what assbucks charges per ounce. I don't drink coffee anymore, though. The caffeine interferes with my REM sleep patterns.

"Think of it as the future. Think of it as empowerment. Your coffee, your way, flawlessly, every time, no judgments.""Had a great experience at Briggo? Why not tweet that? Invented a new combination of syrups and brew temperatures and other elements that yields the perfect drink? Tweet that, too."

Being so delusional must be bliss.

Then there's this:

"Barista robots are barely even a thing yet..."

What kind of garbage application of the English language is this? I've noticed more and more people asking "Is that a thing?". We really are progressing towards a 1984 style language where only the bare minimum of description is required, and everything will be a graded good.

The factory/store of the future will consist of many machines, one man, and a dog. The machines are there to do all the work, the man is there to feed the dog, and the dog is there to make sure the man doesn't touch any of the machines.

The Jamba Juice business model is all wrong. The key to that business is locate tiny, low-overhead juice counters within carting distance of any kind of fruit seller, that way, when fruit is on the cusp of overripening (aka peak deliciousness) however not selling, Jamba can buy up what would otherwise be wasted inventory and use it quickly, gaining profits on their value-adding process (blending with smoothie ingredients). This is the economy of the food bazaar for ages: counters preparing food purchased from wholesalers on the cusp of spoilage. You eat and buy at the same market.

Alas, alas, three vomitingationalizings alas, aroma and tasting of durian of dairy smoothing was upping more than just slightly the remindings of typical Chinese roadside on hot summer day. River pigness on high order monolizing the putrifying means such as like and beyond some more, no treat for the sophisticated US 'american' citizenism palate.

Funny how that works. Liberals get uber-happy that they win a minimum wage vote somewhere and someone comes in and automates hundreds of jobs by a corporation with an incentive to keep costs under control due to government disrupting the orderly flow. At least the refill and guy to the vending machines won't be making minimum wage as they'll probably get an incentive to keep the machines filled and get a higher take.

It's the next smart phone killer ap -- ordering and automatic preparation, serving and billing of fast food at the drive up window. There is no other way to get your food. The only need for humans is feeding the machine with supplies and maintenance. There is nothing about most fast food that cannot be automated.

Tylers - you are missing another big angle on this story, and that is SUBSIDY.

Jamba is looking to place (and is placing) these self serve machines in schools of all stripes and get your tax dollars to operate there. After all, an unhealthy apparatchik is almost like no apparatchik at all!

Just another .gov promoted bogus "healthy" promotion. Right up there with vegetable oils(trans fats/highly refined) instead of animal fats, and the high carb/sugar food pyramid. Modern highly selectively cultivated fruits are pure sugar with a little fiber and not much better for you then HFCS.

Once TPTB get done creating a healthcare shortage, they're going to set their sights on Food reform ... you'll look forward one day to the good old days when you had a variety of HFCS goods like Cheesey-poofs rather than the same old bowl of rice you will get for your day's labours in the paddies.

Unskilled workers need to get themselves some skills. They are increasingly irrelevant. Sometimes they don't have skills through no fault of their own. However, that's not the case most of the time. Learn to do anything, whether plumbing or picking vegetables or mixing asphalt. My local garbage workers are going on strike for even more money, when they do nothing but drive a truck around and pick up containers with a mechanical arm attached to the truck. The sooner that truck gets automated/roboticized, and those guys are no longer sullying the payroll, the better.

Fucking plumbers charge more than dentists. Most of the time they just need to tighten a nut. Then you get a $350 bill.

The problem is getting bonded and insured so you can advertise plumbing services is too expensive for individuals so all the work goes out to large conglomerates. The guy going to you house to actually do the work gets like $20 and the fuck company takes $300 for the privilege of taking you call and sending him there.

Service Experts ranks high on the list of shit corporations of all time.

Taco Bell seems to have more than its share of this kind of problem. In the TB near where I lived, one of the employees was caught putting his shit in the refried beans. A number of customers got sick.

A couple of years ago, a store near me had a guy who was handing out free samples of yogurt. He had jacked off into several of them and was caught because one woman recognized the taste. She even went on record with the newspaper. Yeah, it was hilarious, and I want that chick's phone number.

If nobody works, where does the money come from to pay for everything?

My liberal friends either can't answer the question or say that's what government is for. To provide for the people. I then ask the question again. I then usually get, "If the government can create money, then it can give money to the people."

If Obama ran a third term with a platform of turning the Hunger Games real, he'd probably win in a landslide. "I want you to know...that I'm looking out...for you. Which is why...I've instituted a new policy. That every four years...we send...ten thousand youths...from every state...to fight for each state. The winning state...gets health insurance paid...for the next four years. It will be known...as the Obamacare Games."

The logical end result here is machines that have sex for us ... and machines that have babies for us ... and machines that feed us .... and machines that dispense drugs to us ... and machines that bury us. Then machines that cut out all the middle hassle, and bury us as soon as we are born. Then machines that simply say "Fuck all this human shit, we don't need it".